Abolition of Memorandum of Association and Matters relating to Company Articles

The new Companies Ordinance (“the new CO”) abolishes the requirement to have a Memorandum of Association (“MA”) as a constitutional document of a local company. A company incorporated in Hong Kong under the new CO is only required to have Articles of Association (“AA”). Under the new CO, the information which was required to be contained in the MA under the Companies Ordinance (Cap. 32) (“the old Ordinance”) are set out in the AA.

The AA of companies incorporated under the new CO must contain the following mandatory clauses (the “Mandatory Articles”) :

• Company name (section 81)

• Members' liabilities (section 83)

• Liabilities or contribution of members (for limited companies) (section 84)

• Capital and initial shareholdings (for companies with a share capital) (section 85(1) and section 8 of Part 5 of Schedule 2 to the new CO)

• For an association to be incorporated with a licence granted under section 103 or a limited company granted with such a licence, its AA must state the company’s objects whilst the licence remains in force (section 82).

The new CO empowers the Financial Secretary to prescribe Model Articles for companies.  These replace Tables A and C set out in the First Schedule to the old Ordinance and apply to companies incorporated after the commencement of the new CO.  A company may adopt any or all of the provisions of the Model Articles appropriate to the type of company being formed and the appropriate Model Articles will apply in so far as the articles registered by the company upon incorporation do not exclude or modify them (section 80).

The Model Articles will be in addition to the Mandatory Articles that a company is required to have.

Sections 67, 75 to 86 and 98

There are no transitional arrangements for abolition of the MA.

The deeming provision set out in section 98 of the new CO, however, provides that conditions (i.e. provisions) of the MA of an existing company (i.e. a company formed and registered under a former Companies Ordinance) are deemed to be regarded as provisions of the company’s AA. In addition, as a result of the migration to no-par, any such condition which states the amount of share capital with which the company proposes to be registered or is registered is regarded as deleted and any such condition that divides the share capital into shares of a fixed amount is also regarded as deleted (section 98(4)).

Table A in the First Schedule to the old Ordinance, in so far as not modified by the provisions of the new CO, continues to apply to those existing companies who had adopted Table A (by default or otherwise) as their AA.